Deutsche Bank (DB) to Acquire ABN AMRO's (ABN) Commercial Banking Activities in the Netherlands
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Fortis, ABN AMRO (NYSE: ABN) and Deutsche Bank (NYSE: DB) have signed an agreement by which Deutsche Bank will acquire from ABN AMRO parts of its commercial banking activities in the Netherlands for EUR 709 million in cash.
The businesses to be acquired by Deutsche Bank are part of ABN AMRO Business Unit Netherlands (BU NL) and include two corporate client units that provide a range of financial services to large corporate clients; 13 commercial advisory branches that serve medium-sized clients; parts of the well-known Rotterdam-based bank Hollandsche Bank Unie N.V.; and the factoring services company IFN Finance B.V., the Dutch part of ABN AMRO's factoring unit IFN Group Finance.
The sale of the businesses to Deutsche Bank is in line with the commitments that Fortis made to the European Commission (EC) on 3 October 2007 aimed at addressing the EC's concerns regarding concentration in the Dutch banking market resulting from Fortis' acquisition of certain ABN AMRO assets.
The terms and conditions of the sale are such that ABN AMRO will provide initial credit risk coverage for around EUR 10 billion of Risk Weighted Assets (RWAs). The capital required for this credit risk coverage will be released over time.
The businesses concerned produced pro forma full year 2007 pre-tax profits of approximately EUR 140 million. The sale price represents a discount of approximately EUR 300 million to the businesses' net asset value, as previously communicated by Fortis in its statement of 26 June 2008.
Jean-Paul Votron, Chief Executive Officer of Fortis Group, said: "We have reached a key milestone. The sale of these parts of ABN AMRO Business Unit Netherlands (BU NL) is an essential step in the completion of Fortis's acquisition of certain ABN AMRO assets. We will now be able to proceed with the integration of the acquired activities on schedule and to start realizing the synergies identified as a result of this acquisition." [SM]
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